Issue in late issue of Invoices

[Anup Kumar Grover]

'A' Co 'providing services to 'B' as business auxiliary services throughout the year, in terms of agreement. A issued Service Invoices for the services rendered for the month of April to Jan, in the month of Feb, after obtaining Service Tax Regn. 'B' released the payment in Feb. 'A' deposited the service tax in the succeeding month of issuing invoices.

'B' taken the input tax credit on the basis of said Service tax Invoices after entering it into its books.

Plz advise,

(a) Any Service Tax liability of A in issuing Service invoices (on a/c of Intt or penalty)?

(b) Can A and B make any arrangement/correspondence between them, with regard to justification for late issuing of invoices.

e.g. service rendered were not up to mark, so approval of services rendered were not obtained from B and B were not agreed to release the payment on provisional basis. Thus in terms of service tax rules, services were not completed for month of April to Jan and after approval in Feb, Service Invoice issued.

(c) On the basis of these invoices issued for m/o April-Jan in Feb. Can any audit team of Excise/ST department deny the benefit of CENVAT CREDIT to B?

(d) If later on, any departmental notice issued to A suo moto or by direction of the audit team, for making enquiry specifically say late issuing of invoices (as noticed by audit team) then this notice cause any rejection of CENVAT CREDIT to B.

Any other suggestion in safeguard of interest of A and B

AI Summary

Service Tax Liability and CENVAT Credit Issues Arise from Late Invoicing Between Companies 'A' and 'B' A company, 'A', provided business auxiliary services to 'B' under an agreement, issuing service invoices for April to January in February after obtaining service tax registration. 'B' paid in February and claimed input tax credit based on these invoices. The query seeks advice on whether 'A' faces any service tax liability or penalties for late invoicing, potential arrangements between 'A' and 'B' to justify the delay, and if an audit might deny 'B' CENVAT credit due to the late invoicing. It also questions if a departmental notice to 'A' could affect 'B's CENVAT credit.